French car making industry in resurgence
After having experienced an important drop in production numbers between 2005 and 2014, French car plants are now experiencing a resurgence with new models from PSA, Renault, Nissan and even Daimler assigned to them with big investments from manufacturers.
Between 2005 and 2014, the production of cars in France dropped from 3,5 million units to 1,97 million. Deemed too old-fashioned, too big and not competitive enough for numerous car manufacturers, the French plants were put on the back burner. Today, however, the situation has changed thanks to massive investments and deals with unions.
PSA leads the charge
The first manufacturer to start a renovation plan for its plants was PSA with an investment of 800 million euro in 2014. Other manufacturers followed this year with Toyota investing 300 million in its Valenciennes plant in January, and Daimler putting 500 million in the Hambach plant assembling Smart cars in May. Finally, Carlos Ghosn announced in June that Renault would invest 1 billion euro in its French sites.
The reason for this resurgence and those important investments is the upturn of the European sales since 2014. France, and especially its northern part, is ideally located to serve the major part of Europe.
“We had to know whether it was possible to produce in France considering the more important costs in labour compared to other countries”, explains PSA’s industrial manager, Yann Vincent.
Employees had to accept some sacrifices to keep production on site. Renault signed a deal on competitiveness with unions back in 2013 and PSA followed the same year.
“Our plants were too old, too big and not really practical enough”, explains Yann Vincent. “The work we’ve done can bridge part of the competitiveness gap compared to other European sites”. Even Toyota acknowledges that “Valenciennes isn’t the most competitive plant from the group”.